Software audits: The pitfalls you need to know about

And what you can do to avoid getting caught out
Written by Tim Ferguson, Contributor

And what you can do to avoid getting caught out

With software licence audits on the up, analysts have revealed the pitfalls that businesses need to be aware of and how to avoid them.

Software audits involve vendors requiring their customers to prove their licences are correct for the products they use. Such audits can prove a compliance headache for companies and leave them at risk of a large compensation payout to their tech suppliers as well as a bruised reputation - making it key for CFOs and CIOs to keep licensing up to date.

According to Forrester Research, end users saw an increase in software audits in 2009 and the analyst house warns that sourcing professionals need to make sure they minimise the risks and stay in control of the audit process.

Forrester's Surviving A Software License Audit report highlights several ways in which software audits could hit businesses in the pocket.

According to the analyst, the growth of virtualisation could cause problems, thanks to original licence terms that are often based on the number of physical servers.


Businesses need to make sure their software estate is in order
(Photo credit: BSA)

As more virtual machines and applications are created, fewer physical servers are required, meaning organisations may be paying licences on more physical servers than they are actually using.

Another situation in which businesses can be caught out in a software audit is when an application draws some of its data from another, a process known as multiplexing; if a company's customers use a system to check their account status which draws some of its data from a separate financial application, vendors will often expect businesses to pay an additional licence on that financial application for every customer that indirectly accesses data held within it.

Other problem areas include software which is only licensed for use within a business but which is also used externally. If suppliers or customers have access to a system as well as the business that has paid for the licence - to check the status of an order, for example - vendors are likely to demand licences are bought for these additional users.

Inactive user accounts are another potential pitfall with businesses ending up paying more than they need to.

Related to this is the accidental deployment of applications: even if software is copied onto multiple devices by accident or by someone who didn't realise the licensing implications, vendors are within their rights to request additional licence fees.

Forrester says businesses need to prepare for audits and control software audit teams to minimise the likelihood of this kind of thing happening.

The analysts recommend businesses identify where under-licensing exists and resolve these issues with sales reps, rather than leaving it to an audit team, as it will often be at a more favourable price.

Companies should also check the precise wording of existing contracts to minimise the potential for a vendor to interpret them differently or for terms to be changed without customers fully understanding them.

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